Friday Apple Rumors: 75% of Digital Music Through iTunes

by Christopher Freeburn | June 21, 2013 12:45 pm

[1]Here are your Apple rumors[2] and AAPL news items for today:

Big Haul: While the average Apple (AAPL[3]) iTunes account produces just $12 in annual music purchases[4], iTunes still dominates the music download business, accounting for 75% of global digital music sales in 2012, Billboard notes. There are 575 million iTunes accounts, with total annual purchases — including apps, music, TV shows and movies — for the average account hitting $43 last year. That means that a total of $24.7 billion in sales were made through iTunes. The analysis comes from Asymco analyst Horace Dediu. As the number of iTunes accounts have swelled in recent years, average spending per account on music has fallen. At the same time, average account spending on apps has risen from $7 per account in 2008 to 16% this year.

Threat: Apple says that a government win in its price-fixing case against the iPad-maker could seriously hurt business competition[5], Reuters notes. Apple’s lawyer warned that if the Department of Justice prevails in court, the victory will send “shudders through the business community.” A verdict in the government’s favor would also have a “chilling effect” on companies attempting to enter new markets. The government sued Apple and five publishing companies over accusations that they colluded to set prices for e-books sold through the iBookstore. The five publishers settled with the government, leaving Apple to contest the charges on its own. Prosecutors said that Apple tried to force publishers to accept an agency model for e-book pricing, which ultimately drove e-book prices higher. By contrast, rival e-book seller Amazon (AMZN[6]) set the prices of e-Books sold through its Kindle store. The trial ended on Thursday. If the court rules in the government’s favor, the DOJ could obtain an injunction barring Apple from using the agency model for e-book pricing for two years.

Again: Another Apple 1 computer is heading to auction[7], the Associated Press notes. Christie’s will auction the computer, assembled by Apple co-founder Steve Wozniak in 1976, next week. Bidding is set to start at $300,000, but experts say the machine could bring in as much as $500,000. The Apple 1 that is going up for sale is owned by a retired school psychologist who acquired it second-hand three decades ago and kept it for years in a box in his home in Sacramento, California. The Apple 1 cost $666.66 when the fledgling company began selling it. 200 were produced, of which no more than 50 are still thought to exist. The market for vintage Apple computers is heating up. Last month, German auctioneer Breker sold an Apple 1 for $671,400. In November, a similar Apple 1 sold for $640,000.

For more about the company, check out our previous Apple Rumors[8] stories.